Fees report sparks Russell rift

Vice-chancellors of Russell Group universities are divided over a report they commissioned. It is published today and calls for the introduction of top-up fees in all universities.

Economists who wrote the report are dismayed that the group of 19 top research universities has failed to reach a consensus on their recommendations and will not say it supports them.

Most members of the group declined to comment this week, but sources say many were unhappy that the report presents top-up fees as the only way forward for higher education funding, giving short shrift to other options such as bigger government grants or vouchers.

The report, Funding Universities to Meet National and International Challenges, argues that even "modest" increases in fees, which could mean students paying up to nearly Pounds 14,000 for a degree, could give higher education an urgently needed multibillion pound cash boost.

The extra money could help fund new scholarships and bursaries for students from poorer backgrounds, while a privatised income-contingent loans scheme would cover all upfront and maintenance costs and save public funds, it says.

But some Russell Group vice-chancellors are understood to be uncomfortable with the report because it does not present a range of options. It was written by David Greenaway, professor of economics and pro vice-chancellor at the University of Nottingham, and research fellow Michelle Haynes. It carries a disclaimer stating that the conclusions are "those of the authors and should not be attributed to the Russell Group or any of its members".

The report argues it would be "difficult to imagine" the government allocating more money; a graduate tax would "become another form of general taxation"; and vouchers would add nothing unless students contributed to their value. Differential fees, it concludes, are "the only option".

Nick Barr, economics lecturer at the London School of Economics and one of the report's contributors, said: "Vice-chancellors are in a prisoner's dilemma. If some go for differential fees and some do not, then the ones that do are worried they are going to get their heads blown off. It is something that requires consensus.

"I wish that the Russell Group had said they support this report, not because it is about saving their skin but about saving the whole higher education sector."

Andrew Oswald, economics professor at the University of Warwick and a contributor to the report, said he regretted delays in the report's publication, originally scheduled for the end of May.

"It is entirely predictable that a lot of people, including some vice-chancellors, would find our recommendations a struggle. I think they are wrong, and in the end they will have to change their minds," he said.

The Committee of Vice-Chancellors and Principals, which is to consider the report as part of its own review of higher education funding, would only comment that it intended to present its members with a range of options at its autumn residential meeting.

Dr Barr responded: "Our higher education system is on the point of being flushed down the pan, yet the CVCP hardly seems to be in sharply focused policy formation mode."

Sir Colin Campbell, vice-chancellor of Nottingham University and one of the key forces behind the report's publication, urged: "We must get on and have this debate. We commissioned this report with a very serious intention, and we do not want to pre-empt consultation with other groups."

But the report was immediately condemned by the National Union of Students, which said its conclusions were "totally misplaced" and pledged to call on politicians and policy-makers to distance themselves from it.

Evan Harris, higher education spokesman for the Liberal Democrats, said:

"The effect on access of students from poorer backgrounds, even with scholarship schemes, is too damaging for this to be considered."

Some vice-chancellors outside of the Russell Group signalled their support for the report.

David Wallace, vice-chancellor of Loughborough University, said some institutions such as Loughborough already had top-up fees in the form of sponsorship from major companies.

He said: "There are clearly some courses that command a premium. Whether that should come from students or employers depends on the course. I would be surprised if universities did not respond to the introduction of fees, if it comes to pass, according to demand."

Peter Knight, vice-chancellor of the University of Central England, said it would be "a catastrophe" if differential fees were applied only to Russell Group institutions.

"The key question is whether universities should be free to determine their own fees upwards or downwards. The answer has to be yes," he said.

Text and analysis, pages 6-7; Leader, page 14; Soapbox, page 16